The CARES Act removes the requirement that you must have a prescription for over-the-counter (OTC) drugs in order to use Medical FSA or HSA funds for these expenses. Members may download one copy of our sample forms and templates for your personal use within your organization. The money in an FSA can be used to pay for most health-related items that your insurance doesn't cover or doesn't cover completely, such as crutches, bandages, blood sugar test kits, eye glasses, contact lenses, as well as over-the-counter drugs. Health Care Reform permits the cost of a drug or medicine to be reimbursed as a medical expense only if it is a prescribed drug or insulin.The IRS recently published Notice 2010-59 which discusses the impact of Health Care Reform on OTC drugs. On March 23, 2010, President Barack Obama signed into law a massive piece of legislation aimed at reforming the nation’s health care system. MAPPS of particular interest to OTC applicants include:An exemption and/or deferral request should include: For each category, an Once a final monograph is implemented, companies can make and market an OTC product without the need for FDA pre-approval. Over-the-counter (nonprescription) drug products play an increasingly vital role in America's health care system.
See The Notice provides guidance on Section 9003 of PPACA, which revises the definition of “medical expenses” for employer‐provided accident and health plans, including health flexible spending arrangements (health FSAs) and health reimbursement arrangements (HRAs).
The information provided on this site is not legal advice, does not constitute a lawyer referral service, and no attorney-client or confidential relationship is or should be formed by the use of this site. October 1, 2010. This is the case even if the provider or merchant has an inventory information approval system (IIAS). An alternative approach may be used if such approach satisfies the requirements of the applicable statute, regulations, or both.
According to the IRS, current debit card systems are not capable of substantiating whether an OTC drug has been prescribed. The amendment must be adopted no later than June 30, 2011, retroactive to January 1, 2011 (or January 16, 2011 for FSA and HRA debit card purchases).The views expressed in this document are solely the views of the author and not Martindale-Hubbell.
This is because current debit card systems are not capable of recognizing and substantiating that the OTC medicine or drug were prescribed. These changes affect health FSAs, HRAs, HSAs and Archer MSAs, which will need a prescription to reimburse the costs of OTC drugs purchased after December 31, 2010. They also establish policies intended to achieve consistency in the Agency's regulatory approach and establish inspection and enforcement procedures. Because guidances are not regulations or laws, they are not enforceable, either through administrative actions or through the courts.
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First, many participants are currently or soon will be going through open enrollment for FSAs. Debit cards may continue to be used in FSA and HRA programs for eligible medical expenses other than OTC drugs. However, the IRS said it would not challenge the use of an FSA and HRA debit card for expenses incurred through Jan. 15, 2011, if the pre-health care reform requirements for these debit cards are otherwise satisfied.
Over-the-counter medicine is eligible for reimbursement with a flexible spending account (FSA), health savings account (HSA), health reimbursement arrangement (HRA) and limited care flexible spending account (LCFSA).
September 14, 2010 The Internal Revenue Service, under Notice 2010-59, has issued guidance concerning the purchase of over-the-counter medications in coordination with the Flexible Spending Account, FSA. In addition, the IRS has imposed new restrictions on the use of debit cards to reimburse OTC drugs and medicines, which are described below. Health Care Reform. Neither members nor non-members may reproduce such samples in any other way (e.g., to republish in a book or use for a commercial purpose) without SHRM’s permission.